Does Myanmar offer the right ROI for Private Hospital Chains?

18th September, Team EMeRG

“Even as Myanmar’s healthcare system remains plagued byinefficiencies, there is a sudden surge in the number ofprivate investments”

Pun Hlaing received an injection of US$10 Mn from Indonesian conglomerates Lippo Group in 2015. The firm aims to set up more than 20 hospital units throughout Myanmar

On June 18th 2015, First Myanmar Investment (FMI) setup a joint venture with Indonesian conglomerate Lippo Group to expand healthcare facilities in Myanmar

About 15 hospitals from Malaysia, Singapore and Thailand have setup subsidiary offices in Myanmar to help their hospitals provide high quality treatment

Private hospitals in Yangon region have increased their bed size to assist the growing population seeking specialized treatment

www.emerg-inc.com

Inefficiencies in Myanmar Healthcare

47578+

Number of Burmese patients who received treatment in Thailand

Expenditure by Burmese patients in foreign countries

$150 Mn

Scarcity of Private hospitals in other regions

36% of the country’s private hospitals are located in Yangon. More than 60% of the Pharma sales happen in Yangon and Mandalay

Lack of Healthcare specialists

83

Number of Cardiologists in Myanmar

<65Number of Oncologists in Myanmar

<90

<30 Number of Specialty hospitals

www.emerg-inc.com

Of suspected Malaria cases diagnosed or detected

Poor Health Indicators

40%Burmesechildren underthe age of 5moderatelystunted

200/100,000 –

Maternal Mortality Rate

<50%

Public Hospitals

<1200 Private Hospitals

~150

2015

Number of Hospital Beds:

< 55308 Number of Doctors:

< 29832

Healthcare Infrastructure in Myanmar: Quick Facts

87.8%Private spending on Healthcare

0.6 doctors per 1000 Population

www.emerg-inc.com

Primary and secondary health centers

<100

1.9%

4.6% 4.4%6.0%

4.0%

7.4%

Myanmar Thailand Philippines Vietnam Malaysia Cambodia

How Myanmar Compares with its Neighbors

93.7%

56.7%82.9% 85.0% 79.9%

Myanmar Thailand Philippines Vietnam Malaysia

Very High Out-of Pocket Expenditure

Low Healthcare Expenditure per capita

•Myanmar’s government spends less than $1 per person annually•WHO ranked Myanmar the lowest among 190 countries on “overall health system performance”•Approximately 2% of GDP spent on healthcare

Low % of GDP Spent on Healthcare compared to other ASEAN Countries

www.emerg-inc.com

What’s Driving Investments in Private Hospitals?

Liberalization of policies for Foreign Investors

To improve the country’s healthcareinfrastructure, the government introduced aforeign investment law that allows 70%foreign investments in hospitals andhealthcare sector. Over the last 5 years, therehas been 50% increase in the number ofprivate hospitals

2013

Increasing Average Annual GDP Growth

$

$

$

$There has been steady growth in Myanmar’sGDP over the past few years. Myanmar’s GDPgrowth rate is anticipated to be >7%

www.emerg-inc.com

Increased Government Expense on Healthcare

6.8%increase in health ministry’s budget

In 2015, health ministry’s budget is expectedto grow to $757 Mn from $450 Mn in 2013

Proliferating Millionaires in Myanmar

As the country emerged from militarydictatorship to an independent marketeconomy, the number of millionaires areexpected to grow by 687%, from 40 to 307 by2022

~40 number of Millionaires in 2013

1988

Foreign investment in healthcare

.

Can Private Hospitals Yield ROI?

Increasing private beds – has it helped?

People preferring private clinics- Will it help?It is estimated that a large majority of people in Myanmar would prefer going to private hospitals for common illness as compared to visiting public hospitals

$520 Mn Will private investments offset the lack of health insurance structure? Can people of Myanmar pay for private healthcare?

from private investors till 2015

www.emerg-inc.com

1500No. of doctors that need to graduate every year as

Can shortage of doctors be an opportunity that the private sector could capitalize on? Could the undercompensated medical workforce be tapped by better incentives?

Tiered pricing structure - Will it drive higher foot-fall?

While the affluent class in Myanmar prefers healthcare services abroad, tier based pricing of healthcare services is likely to expand hospital’s reach to other socioeconomic classes

Private hospitals in Yangon which have increased their bed-size over the past few years are yet to report profits

Ask EMeRG

The above snapshot is an excerpt from our larger syndicated analysis on ‘Understanding med-tech customer segments in ASEAN’ region. Our in-depth primary research and ethnography based analysis will help you answer a multitude of questions including needs-based customersegments, hospital demographics, purchase patterns and purchase decision criteria, medical device market size and addressable markets etc.

For in-depth customer insights, custom research needs, and installed base surveys for your Medical device portfolio, please visit www.emerg-inc.com or write to us at letsspeak@emerg-inc.com. EMeRG offers the FIRST OF ITS KIND ethnography based CUSTOMER-CENTRIC reports for emerging markets.

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